In the example you are part of a very successful startup company. To get going you made extensive use of cloud computing or Software as a Service (SaaS) solutions. It was great! But over time, your salesreps started to complain (salesreps never do that, do they?); they had to go too many places with different logins to get what they needed to know. It was taking way too long. And it didn’t seem consistent to them; what they had quoted didn’t match the win probability values on the opportunity, they could match their configurations and quotes but couldn’t find quotes they thought they had submitted as orders. And you noticed that your salesreps were spending way more time making sure their commissions were accurate instead of being out there selling. Does any of that seem familiar to you?

For this example, I might respond to the questions above like this:

Why transform? To increase salesrep productivity and increase revenue; get the reps to spend more time selling!

Obviously there’s more to it. People will have many perspectives, so depending on who you’re talking to you might get slightly different answers to the questions. But that’s OK; you want people to see what’s in it for them at the vision level.

Vision has lots of applications; it isn’t limited just to the overall company reason for being. It is an effective tool in any cross functional transformation program where many people need to internalize a common purpose for change.

What do you think of the example? Will people will be able to see why to transform? Will they know what success looks like? I’ve seen a vision like the one in this example used on a program. It was understood by everyone; people were empowered and inherently knew what to do and why. No one was talking about how we couldn’t do something but about how we could and would get things done. It was a productive environment with rapid decision making done at the right level. And the results were spectacular, a global change on time and on budget which was rapidly adopted. Not bad for a little upfront investment!

Do you have a transformation program that could use a picture that is worth a thousand words, a manifest vision?

BTW: I do not endorse or oppose any of the companies whose logos do or do not appear in the example. They are just the ones I thought of today.

I have been challenged with a lot of different and complex puzzles over the course of my career. But I must say that I have often found software to be the most challenging of them all. This is because with software there is nothing physical to tie you down (yes, it has to run on something but these days that’s not too restrictive). Your only limitations are the imaginations of product development and sales people. In my experience that is no limit at all!

Just look at cloud computing. There’s lots of hardware sitting out there waiting to be called upon at a moments notice. But it’s the software that enables you to add capacity on demand. It’s the software that makes you able to share a platform development environment. And of course “software” as a service started the whole cloud computing revolution.

And just look at the number of applications available today. It boggles my mind when I go to the app store and browse. There are lots of very creative people out there building software to do things I would never have dreamed possible.

From a business perspective, what makes software so challenging? If the software is put out in cyberspace for free and it’s “buyer beware” so you don’t provide any support, then software is pretty simple. But the minute you decide you’d like to make some money off this good stuff you’ve developed, that’s when the complexity begins.

There are lots of things to think about once you decide to sell your software (the reality in the quote above). Beginning with deciding what feature sets you are going to offer, through figuring out your pricing and licensing models (more on this in future blogs), to considering your fulfillment methods while protecting your intellectual property and ultimately setting up technical support and renewal methods (after all you want to keep that revenue coming in, right?) there are a large number of operational business processes involved in keeping it all running. For the finance people in the crowd, there is revenue recognition and tax to worry about too. In addition, if you’re offering your software as a service, then there’s the whole platform and 24X7 global operating considerations that can have a significant impact on your brand if not done right. Here’s another perspective on the difficulty of the XaaS business, Even the Tech-Savviest Struggle with Cloud Based Business Models.

Remember those development and sales people? While you’re thinking about all the stuff in the last paragraph, they are busy changing the license models and coming up with new ways that they could bundle things together to make it easier to buy. And the list goes on. I am so impressed by the people who create at such a rapid pace. Imagination is an awesome thing!

For those of us who are trying to keep an operational model functioning at the speed of software innovation, it makes for a pretty complex and ever changing jigsaw puzzle. It is never boring and that’s what I like most about it!

Do these sound familiar to you? What other challenges have you faced in running a software business?

At one point in my career, I had more-or-less the same position for ten years; but during that time I was employed by five different companies. And over those ten years, those five companies acquired dozens of other companies. Each time I was acquired or we did the acquiring, I was responsible for ensuring that the two companies operated together seamlessly; from Marketing and Sales to Technical Support there was a need to be efficient and effective, as quickly as possible. No pressure!

There are many reasons that companies merge. It is important to know what style of acquisition you are looking at before you decide how to approach integrating the organizations.

One of the first styles of acquisition I was exposed to was a straight market share grab. The two companies were in the exact same business serving the same market and wanted to reduce the number of competitors. In this case, integration is pretty straight forward; get on the acquiring companies processes and systems as quickly as possible. There is nothing differentiating in this situation so move fast!

A technology acquisition is relatively straight forward also, especially if there is a relatively small installed base of customers. I’ve participated in dozens of this style of merger; they are pretty commonplace in the technology sector. In this situation the focus is on integrating R&D. On the operational side, you typically just have to get the general ledger balances moved to the acquiring company’s books, link the networks and web sites and you’re in business. Simple enough, right?

Acquiring a company which provides you a new product line might not be too complex as long as it’s a product similar to those you already have. In this case, you will still be using the acquiring company’s processes and systems. You have to do the technology acquisition work along with product set ups, some data conversion and new employee training; but it’s still pretty straight forward. I have done a couple of these where the integration was done within the first 180 days post close. I even did one where the merged company was operating on Day One!

From here it gets a little more interesting (Interesting is an IT term that means the cost and complexity just went up exponentially!). There are three styles where significant diligence should be applied to determine the best integration approach. I have been involved in acquisitions of each type.

The first is what I call a new business model. This means we’re in the same business but there is a new go-to-market model involved. In my example, an enterprise supplier (low volume-high dollar) acquired a distribution supplier (high volume-low dollar). This is a nice blend for expanding market penetration.

The second style is new market segment. A company with a consumer orientation is going to merge with an enterprise focused company. This has the all considerations of the new business model along with different target markets. This adds another layer of complexity.

The final style is the partial merger. In this case you have to split some part of the business out of the parent company, this can be simple (like a single product line) or not. There are lots of things to think about in this scenario!

There is no one approach that works best in the last three scenarios. I have used neither (did a full new implementation for the merged company requirements), used the acquired company’s or used the acquiring company’s processes and systems. In any of these last three styles the approach is that most common answer – “It depends!”

I was having lunch with a colleague the other day and our conversation turned to cloud computing. He had recently made a presentation to some CIOs and put forth the thought that cloud computing was the new version of the old timesharing concept. An interesting idea; maybe things haven’t changed so much.

Let’s look at a couple of extracts regarding the history of computers and see if there is a resemblance to cloud computing today.

In the 1970’s, you dealt with what today are called mainframe computers. There were 2 ways to interact with a mainframe. The first was called time sharing because the computer gave each user a tiny sliver of time in a round-robin fashion. Perhaps 100 users would be simultaneously logged on; each typing on a teletype machine.1 Virtual machines today could be considered the tiny slivers of time back in the 1970s. Providing additional capacity to the 100 companies using the Infrastructure as a Service (IAAS) capability on demand from their “teletype” is sharing compute power, maybe not in round robin fashion, since things have speeded up considerably since then, but still time sharing of resources.

A timesharing computer was “one organized so that it could be used simultaneously by many users, each person having the illusion of being the sole user of the system – which, in effect, became his or her personal machine.”2 This is interesting since anyone using applications not resident on their personal device qualify here, in the cloud or not.

It was also more efficient, many thought in the late 1960s, for a company (the timesharing utility) to own the mainframe and rent computing power than for each business to own an independent computer.3 Add a few services on top and it seems to me you have Platform as a Service (PaaS).

The types of resources that can be shared have grown and the metrics for charging may have changed, but the fundamental concepts seem pretty similar to me.

My name is Ellen Terwilliger. Over the last 20+ years I have been responsible for global business applications for a number of Fortune 500 companies. I love apps! But more, I love the value that is received when people, process and technology work together end-to-end and make a difference.

My husband, who is in the home health care field and knows absolutely nothing about business, asked me over the years to describe what I do and why I like it. This is the best way I’ve learned to explain it:

What I do is like putting together jigsaw puzzles. And not those cute 100 piece puppy dog puzzles either. In these jigsaw puzzles you don’t know how many pieces there are, the pieces are all cut in similar ways, the picture is the same on the front and the back, the borders are not straight but misshapen and there is often more than one way to complete the puzzle. Sometimes the puzzles are even 3D! Putting the puzzle together correctly is like getting a business to run effectively and efficiently. In addition, I don’t actually touch the puzzle pieces; I influence others to describe and understand them, move them around and ultimately make them fit. Of course over time I have seen a lot of puzzles and a lot of pieces; but it’s important every time we do a puzzle that everyone working on the puzzle has the same view of the pieces, and the puzzle. Doing jigsaw puzzles is complex, it’s never works the same way twice and something unexpected always happens. I thrive on the variety! Like putting the puzzle together, making business run well is challenging but when it all comes together, it looks cool, is incredibly satisfying and a lot of fun! I love what I do!

This blog is intended to share experiences and lessons I’ve learned while completing those jigsaw puzzles. I hope it will help business leaders and anyone involved in attempting to make large-scale change to avoid some pitfalls or better yet, learn something that will make a difference and help you be successful.

Have you ever spent millions on a program only to discover it didn’t deliver all that was expected? Or maybe you found that only one part of the situation was being addressed and other larger opportunities were being ignored or even damaged. I recall a data center that was built with a window to allow secure visibility. The only problem was the huge cooling unit that completely blocked the window. Oops! I am sure you have a few stories of your own.

I have been a part of a few programs that didn’t quite deliver all they could. But I have also had the fortune to be on programs that were wildly successful beyond all expectations. I can say that the latter were a lot more fun! In seeking to repeat the fun experiences, I analyzed the core differences between the two (and yes, I have read the literature too). In my experience, the successful programs had vision and solution descriptions that informed everyone on the program how to make decisions in their area. Each and every person saw the same picture of what success looked like and knew which way to go. Talk about rapid decision making!

For instance, I was on the leadership team of a global ERP implementation for a $2B company. The vision for the program was: “Any product or service quoted and then ordered on a single purchase order by the customer”. The outcome was ease of doing business and customer satisfaction. Of course there were exceptions to the vision; but people knew to escalate so appropriate decisions could be made. Recognized as hugely successful by the CEO at an all company meeting, the program came in on time and underbudget. Pretty powerful stuff; not to mention the awesome party we had with some of the savings!

The figure above shows that enormous value is received by your entire organization through the investments made in manifesting your vision and describing your solutions. And the value continues to flow down into the functions and the people that execute to your vision. Compared to the time, money and resources required for execution, the investment made in vision and solution is minimal and returned many times over.